Growing income levels in India are giving rise to multiple investment options to individuals looking to park some of their disposable income across different asset classes.
Apart from investing in the stock markets, gold and mutual funds; real estate seems to be the most preferred asset class in India. An average Indian household invests about 77 percent of their total assets in different forms of real estate like - residential properties, weekend homes, open plots, etc.
However, investments also need to be planned to consider one's tax planning exercise, regular income generation, and future security. Taking all this into consideration, one of the most viable investment options comes in the form of purchasing a second home. While the value of the second home will appreciate over time, it can also generate money in the form of rentals, which not only takes care of the maintenance costs but also adds to one's savings. On top of this, buying a second home can also help you get a home loan tax benefit.
Buying a second home comes with its own set of financial benefits and thereby making it a rewarding experience. As per the latest interim budget, the benefit of self-occupied property has been increased from one property to two house property.
Which means: If a person owns three house properties, out of which he lives in one of them, and the other two are not given on rent, then any two out of three house properties can be considered as 'self-occupied'. The third one will then be considered as deemed to be let out and taxed accordingly. The deduction for interest on housing loan for the two self-occupied house properties shall not exceed Rs 2 lakh.
For the home that one purchases on a loan, the principal amount repaid up to Rs 1.5 lakh will be deductible under Section 80C. Additionally, interest paid up to Rs 2 lakh under Section 24 will be deductible. There is no restriction on the number of houses for which one can claim this deduction as per the income tax laws. The laws also do not differentiate between self-occupied property and a let out property, for this point. So, though, a person can take home loans for more than one property, the cumulative amount of deduction shall be restricted to Rs 1.5 lakhs, for repayment of the principal amount of all the home loans taken together.
Post thorough research on property prices and tax exemptions, one could easily purchase a second home by opting for a Home Loan from Bajaj Housing Finance Limited (BHFL) at competitive rates. With minimal documentation required, BHFL offers a hassle-free experience when it comes to Home Loan. Customers could also use the Bajaj Housing Finance Limited's EMI Calculator to learn everything about their property price, interest rates, EMIs and tax exemptions.
This story is provided by BusinessWire India. ANI will not be responsible in any way for the content of this article.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)